Financial Analysis Of Pakistan Telecommunication Company Finance Essay

With employee strength of 30,000 and 5.7 million clients, PTCL is the largest telecommunications supplier in Pakistan. PTCL besides continues to be the largest CDMA operator in the state with 0.8 million V-fone clients. The company maintains a prima place in Pakistan as an substructure supplier to other telecom operators and corporate clients of the state. It has the possible to be an instrumental agent in Pakistan ‘s economic growing. PTCL has laid an Optical Fibre Access Network in the major metropolitan Centres of Pakistan and local cringle services have started to be modernized and upgraded from Cu to an optical web.

This study is being started with the brief and complete debut of organisation, its historical background, its services and its merchandises offerings. In this study organisation construction is discussed as Pr the demand of internship. What is the hierarchy in the organisation every bit good as working of assorted sections are briefly discussed.

The most of import thing the BUSINESS STRAGTEGIES is discussed in such a manner that it ‘s non hard to understand it. Internal and External analysis has the critical importance, which in this study is besides done.More over the Financial Analysis is besides done which is picturing the fiscal place of the org in the market topographic point. Whereas SWOT analysis is done which clearly sows what are the strengths, failings, chances and menaces in the organisation. Finally some suggestions and recommendations are given to org in this study. Limitation although really few but ca n’t be negligible are discussed. Thus this study wholly depicts the true image of PTCL in a meaningful manner

Table of Contents Page No

Chapter No. 1

1.0 Introduction

1.1 Company Profile

1.2 Vision

1.3 Mission

1.4 Core Valuess

1.5 Board of Directors

1.6 Departments and their Working

1.7 Finance Wing Working

1.8 Number Of Employees In Finance Section

Chapter No. 2

2.0 FINANCE & A ; ACCOUNTING SYSTEM OF PTCL

2.1 Finance System Of PTCL

Chapter No. 3

3.1 Support OF PTCL

3.2 Mobilization Of Fundss

3.3 GENERATION OF FUNDS

3.4 Beginnings OF FUNDS OF PTCL

3.5 ALLOCATION OF FUNDS

3.6 Use Of Electronic Data For Decision Making

3.7 Fiscal Analysis

Chapter No. 4

40 Fiscal Analysis

4.1 Vertical Analysis

4.2 Horizontals analysis

4.3 Ratio analysis

4.4 Liquidity Analysis

4.5 Decision

Chapter No. 5

5.0 SWOT analysis

5.1 Strength

5.2 Failing

5.3 Opportunities

5.4 Menaces

5.5 Suggestions and Recommendations

5.6 Future Prospects Of The PTCL

Appendix

Main Offices

Table of Figures Page No

Chapter No. 1

Fig. 1.1

Fig. 1.2

Chapter No. 4

Fig. 4.1

Fig. 4.2

Fig. 4.3

Fig. 4.4

Fig. 4.5

Fig. 4.6

Fig. 4.7

Fig. 4.8

Chapter No. 1

1. Introduction

Pakistan Telecommunication Corporation ( PTC ) has established in December 1990, taking over operations and maps from Pakistan Telephone and Telegraph Department under Pakistan Telecommunication Corporation Act 1991.

This coincided with the Government ‘s competitory policy, promoting private sector engagement and ensuing in award of licences for cellular, card-operated payphones, paging and, recently, informations communicating services.

In 1994, the PTCL becomes the company limited ( Pakistan Telecommunication Company Limited ) by issued six million verifiers exchangeable into 600 million portions

of the PTCL in two separate arrangements. Each had a par value of Rs. 10 per portion. These verifiers were converted into PTCL portions in mid-1996.

In 1995, Pakistan Telecommunication ( Reorganization ) Ordinance formed the footing for PTCL monopoly over basic telecommunication sector in the state. It besides paved the manner for the constitution of an independent regulative government. The commissariats of the Ordinance were lent permanency in October 1996 through Pakistan Telecommunication ( Reorganization ) Act.

The twelvemonth 2006-07 in the telecom sector was marked by the phenomenal growing in the nomadic sector in Pakistan, which doubled its subscriber base to 60 million. The teledensity increased from 26 % to 40 % , assisting to distribute the benefits of communicating engineering across the state. PTCL ‘s nomadic phone subordinate Ufone ‘s endorser base grew by more than 87 % , from 7.49 million to 14 million. The twelvemonth besides witnessed the entry of major telecom companies, most notably China Telecom and Singtel, into market.

The denationalization of the company was completed in the FY06, following the buyer of 26 % ‘B ‘ category ordinary portions by Etisalat International Pakistan L.L.C. EIP took over direction control on 12th on April 2006.

In short PTCL has been working smartly to run into the double challenge of telecom development and socio-economic upheaval of the state. This is characterized by a clearer grasp of ongoing telecom scenario wherein convergence of engineerings continuously changes the form of the sector.

A step of this apprehension is progressive steps such as constitution of the company ‘s Mobile and Internet subordinates in 1998.A As telecommunication monopolies head towards an at hand terminal, services and substructure suppliers are set to confront even bigger challenges. Pakistan besides entered post-monopoly epoch with deregulating of the telecom sector in January 2003. PTCL is in full consciousness of the same, and future policies feature a strong strong belief of healthy competition.

1.1 COMPANY PROFILE

With employee strength of 30,000 and 5.7 million clients, PTCL is the largest telecommunications supplier in Pakistan. PTCL besides continues to be the largest CDMA operator in the state with 0.8 million V-fone clients.

The company maintains a prima place in Pakistan as an substructure supplier to other telecom operators and corporate clients of the state. It has the possible to be an instrumental agent in Pakistan ‘s economic growing.

PTCL has laid an Optical Fiber Access Network in the major metropolitan centres of Pakistan and local cringle services have started to be modernized and upgraded from Cu to an optical web.

On the Long Distance and International substructure side, the capacity of two SEA-ME-WE pigboat overseas telegrams is being expanded to run into the increasing demand of International traffic.

1.2 Vision

To be the prima Information and Communication Technology Service Provider in the part by accomplishing client satisfaction and maximising stockholders ‘ value ‘ .

The hereafter is blossoming around us. In times to come, we will be the nexus that allows planetary communicating. We are endeavoring towards mobilising the universe for the hereafter. By going spouses in invention, we are ready to determine a hereafter that offers telecom services that bring us closer.

1.3 Mission

To accomplish our vision by holding:

An organisational environment that Fosters professionalism, motive and quality

An environment that is cost effectual and quality witting

Servicess that are based on the most optimal engineering

A ” Quality ” and “ Time ” witting client service

Sustained growing in net incomes and profitableness

1.4 Core Valuess

Professional Integrity

Customer satisfaction

Team Work

Company Loyalty

Corporate Information

1.5 Board of Directors

Mr. Najibullah Malik

Chairman PTCL Board

Secretary IT & A ; Telecom Division, Ministry of Information Technology

Government of Pakistan, A

Capital of pakistan

Mr. Abdulrahim Abdulla Abdulrahim Al Nooryani

Chairman & A ; Chief Executive Officer

Etisalat International Pakistan L.L.CA

Executive Vice President Contracts & A ; AdministrationA

Etisalat, UAE

Mr. Salman Siddique

Secretary ( Finance ) , Ministry of Finance

Government of Pakistan, A

IslamabadA

Mr. Abdulaziz Ahmed Saleh Ahmed Al Sawaleh

Chief Human Resources Officer

Etisalat, UAE

Mr. Mushtaq Ahmad Bhatti

MemberA Telecom

Government of Pakistan,

Capital of pakistan

Mr. Fadhil Mohamed Erhama Al Ansari

Executive Vice President Engineering

Etisalat, UAE

Mr. Khursheed Ahmed Junejo

Ambassador, Embassy of Pakistan

Abu Dhabi, UAE

Mr. Abdulaziz Hamad Omran Taryam

General Manager, Northern Emirates

Etisalat, UAE

Dr. Ahmed Al Jarwan

General Manager

Real Estate

Etisalat, UAE

Ms. Farah Qamar

Company Secretary PTCL

PTCL Headquarters, A

Capital of pakistan

Fig.1.1 Organizational Structure

( Beginning: ptcl web site )

PTCL fundamentally consist of horizontal direction construction, which consist of above appellations

1.6 Departments and their Working

The PTCL Organizational construction needs to be formalized on emergent footing.

1.7 FINANCE WING STRUCTURE

At this degree there is one caput SEVP ( Finance ) who controls the maps of FINANCE, ACCOUNTS, and REVENEU with the helper of EVP in their respective within the Region, Director Accounts has Senior Revenue Officers in his country of Finance Jurisdiction on Division Level. The Senior Revenue Officer, normally the caput of Finance Division and Revenue Officers so supervised on District degree.

SEVP ( Finance )

EVP ( Finance ) , ( Accounts ) & A ; ( Revenue )

The Director ( Finance ) , ( Accounts ) & A ; ( Revenue )

On the Regional Level consisting two or three Divisions.

The Senior Revenue Officers on Division Level

The Revenue Officers on District Level

In position of the disputing scenario PTCL has to take bold stairss sing its organisational construction in order to show that PTCL has set-up arms-length relationships among the staff. There should be separation of Finance Wing from the Engineering Wing. Finance Wing should give autonomy to take the determination in their favour. Management has to take the strategic determinations, the clear and institutionalised agreements.

Fig.1.2 Finance Wing Structure

SEVP ( FINANCE )

EVP ( Revenue )

EVP

( Finance )

EVP ( Accounts )

GM ( Finance )

GM ( Revenue )

GM ( Histories )

Director ( Finance )

General Manager of the Region. He will describe to the SEVP ( OPS ) every bit good as any officer designated by C.E

Director ( Revenue )

Director ( Accounts )

As shown in the chart above finance wing of PTCL consist of multiple appellations.

Finance wing of PTCL is consist of three chief subdivisions

Finance, Revenue and Histories

1.8 NUMBER OF EMPLOYEES IN FINANCE Section

There are about 15987 ( 2006-2007 ) employees are working in the PTCL, which are being divided into flatly here under

Division of Employees harmonizing to their Status

Regular

Daily bet

Through T.F

Contract

*Ad-hoc

12452

1725

956

854

Nothing

* There is no any employee in PTCL on Ad-hoc footing. This system of enlisting has since been changed into contract footing.

Chapter No. 2

2. FINANCE & A ; ACCOUNTING SYSTEM OF PTCL

The PTCL FINANCE & A ; ACCOUNTING system is really divided into three wings.

Finance

Histories

Gross

1 ) Finance

The SEVP ( FINANCE ) is concerned with the make-up of the all type of fiscal determinations particularly in the context of acquisition, funding and direction of all assets with some end in head. The EVP ( Finance ) with the General Manager ( Finance ) extend their expertness in the determination devising procedure.

2 ) History

Here the SEVP ( Finance ) is one time once more concerned by heading the EVP ( ACCOUNTS ) and General Manager ( Accounts ) to cover with all Accounts Decision. In PTCL the Finance and Accounting are so correlative but the difference between finance and Accounting is the method of Funds Recognition and the determination devising. In the Accounting the Director Accounts in the PTCL Regions assist the higher direction.

3 ) Gross

Here the SEVP ( Finance ) is one time once more concerned by heading the EVP ( Revenue ) and General Manager ( Revenue ) to cover with all Revenue affairs. One Director Revenue within the Region aid to implement and command the influx of Revenue and Reconcile it with the PTCL Headquarters Islamabad.

The PTCL is really the Revenue Generation organisation. PTCL Collect the Gross from the following manners.

Gross from System Billing of Land Line Numbers.

Through Line Rent of Land Line Numbers.

Through National broad dialing from LLN ‘s ( Land Line Numbers )

International dialing from LLN ‘s

Supplying Value Added services to clients. Like UAN ( Universal Access Numbers ) , PABX ( Private Auto Branch Exchanges ) , VPN ( Virtual Private Network ) Bandwidth of ISP ‘S ( Internet service suppliers )

PTCL has its three subordinates PAKNET ( taking ISP in the state ) , UFONE ( alone cellular phone company in Pakistan ) , TF ( Telecom Foundation ) the taking foundation for the public assistance of employees of Telecom Sector.

2.1 Accounting SYSTEM OF PTCL

In PTCL the regulations contained in the particular volume of the PTCL under which the SEVP ( FINANCE ) is responsible for making the process of Accounting affairs.

Capital RECEIPTS SIDE.

Gross FROM BILLING SYSTEM

Gross from Usual client.

Gross from DXX System

Gross from DSL System

Gross from PABX/PBX System

Gross from Card Phone Operators

Gross from IPOs Internet service suppliers

Gross from Mobile Phone Operators

Co-location charges from assorted companies

Gross FROM OTHER

Gross from Overseas calls ( Incoming )

Gross from Premium PRS ( 0900 ) calls

Income from Dismantle Exchanges

Gross from MDF used by other companies

Capital EXPENDITURES

INSTALLATION OF NEW EXCHANGES

Expenses of installing of new Exchanges are the major capital disbursal of PTCL because PTCL purchases the new telephone exchanges from France, Italy, Germany and China. So heavy cost is to be paid for buying procedure in order to proper border. Each exchange holding different capacity and due which each Engineer should has to be trained

consequently so disbursals rises on buying of new Telephone Exchanges. This is the chief disbursal of PTCL.

Extension OF EXISTING EXCHANGES

The extension of the bing exchanges is the desperate demand as the denseness of the population is increasing twenty-four hours by twenty-four hours and in order to carry through the basic communicating and make full the communicating spread PTCL has to widen its normal Telephone Exchanges in conformity with the demand and per paid connexion. So PTCL sustain heavy disbursals on the extension of exchanges.

MINOR EXPENDITURES

INTERNAL AUDIT AND TECHNICAL INSPECTION

The PTCL has sustained immense sum in context of internal audit both Accounts and Technical from assorted bureaus. For illustration M/s Ferguson carry on both internal audit and external audit and payment made to hearers in the disbursals of the company.

ADMINISTRATION AND CONTROL EXPENSES

Some clip in the best involvement of company, some disbursals could be occurred for illustration if there is demand of initiation of a fiscal analyst in one part or if there is demand of an Engineer so transportation and posting order can be issued and going and preparation disbursals could be realized to employees.

SALARIES OF STAFF

The monthly wage of the staff is rest with the blessing of PTCL H.Q Islamabad. PTCL is passing batch of sum on the wages.

Printing AND STATIONARY CHARGES

On printing of letter paper PTCL spends sensible sum.

Contribution IN PROVIDEND FUND

There is besides part in the provident fund from the PTCL.

2.2 FINANCE SYSTEM OF PTCL

PTCL has magnificent finance construction ; it is fundamentally Product Oriented organisation so here, the Revenue is the Life Blood as such for any other net income seeking organisation. So we should hold isolated the Revenue from Finance side or either we should see the Finance in the context of Revenue.

Finance activities can be evaluated in footings of PTCL ‘s basic fiscal statements analysing through

Finance planning

On PTCL HQ Islamabad, SEVP ( Finance ) is, who with the concurrency with the CEO for doing all the Finance Planning that ‘s manner the PTCL has to shoot the money in order to hike up the concern and in order to finish the stiff competition faced in the telecomm sector. Before taking any determination sing fiscal be aftering the bill of exchange could be presented before the Board of Governors. In this subdivision there is demand of funding either in the WLL ( wireless local cringle ) sector or wire-line or nomadic operator services.

Pull offing the PTCL ‘s Asset construction

PTC is really organized organisation and it has besides its fixed as good with the current plus. So there are many experts in order to maintain the oculus ticker on the PTCL substructure, for illustration Director ( Fixed Assets ) is responsible for the care and fix of the edifice and machinery on the Regional degree.

Pull offing the PTCL ‘s fiscal construction

PTCL fiscal construction is in the safe hands the basic making for the station of Assistant Accounts Officer is MBA ( Finance ) and for the SEVP ( Finance ) the officeholder should possess the grade of MBA with ACMA & A ; CA. Due to such fresh blood the immature and energetic fiscal direction taking some bold determination the consequences of which are awaited up boulder clay.

Chapter No. 3

3. Support OF PTCL

3.1 MOBILIZATION OF FUNDS

PTCL mobilized its financess with following ways.

Buy the new imported substructure like new Exchanges etc

PTCL mobilized its discoveries largely in the purchase of new telephone exchanges from abroad ( France, Italy & A ; China ) . There is besides purchase of accoutrements of telephone exchange generators and other equipments.

Capital outgo for the organisation.

There are assorted disbursals for the PTCL in the context of capital outgo that has already been mentioned in old pages.

Purchase and acquisition of shops.

PTCL shop points are really of import constituents i.e Stationery, stand-by Exchanges, generators, heavy spars and other equipments. PTCL spend batch of financess on these points.

Loan and progresss to others, and re-investment.

There are offering of Loan and progresss to the employees on assorted rates harmonizing to the length of services on axial rotation. This is the chief beginning of mobilisation of financess.

Payment of dividend to the shareholders.

Payment made to the stockholders in the context of dividend to be paid to the stockholders. PTCL has presently announced the divided of Rs.32/per portion.

Wages of the staff all over the state.

Obviously services rendered by the staff and in this manner PTCL has to pay fine-looking sum to their staff, those are the chief beginning of bring forthing the gross.

Annual Bonus to employees.

PTCL pays one-year Bonus of Rs. 12000/- to its employees on the Eid juncture.

Security sedimentations, Transportation of Company ‘s Land & A ; Building.

Where PTCL does non happen any edifice or land so security sedimentation may be paid to the private landowners for the installing of PTCL substructure.

Insurance of the Company

PTCL offers the insurance from its ain side in instance of decease and medically unfit of its employees.

Pension, alumnus, and other periphery benefits.

For the pension and tip of the retire functionary PTCL mobilized its financess consequently.

Supply of Furniture and Fixtures to the office edifices.

This is the duty of the Management to be provided the furniture and fixture to the office edifices consequently.

Renovation, change, and rental charges of in private owned edifices.

PTCL has to pay the fine-looking sum for redevelopment and change of bing edifice and the charges of in private owned builders are being issued consequently.

Premium paid to the other telecomm companies of different states in the context of abroad calls and media used.

3.2 GENERATION OF FUNDS

Amount Realized from System Billing.

Amount Realized from defaulters.

Gross from Value-added Servicess.

Bandwidth installations provided to the companies.

Gaining from DXX, PSTN, PABX, VPN, PRI & A ; ISD.

Media used by cellular and pay-card companies and earn royalty.

Gaining from subordinates PTML, PAKNET & A ; TF.

Sum realized through co-location charges.

Basic Rate Interface provided to the endorser.

International dialing clients.

Corporate Charge clients, valued clients.

Gaining from MTR nomadic Termination Rate.

Gaining from Incoming Overseas Calls in form of premium from abroad

3.3 Beginnings OF FUNDS OF PTCL

Cash generated from operations

In this context we can state that PTCL usual earning batch much more depends upon the usual earning from Telephone figure and payments of the measure thereof, this is the primary beginning of financess of PTCL.

Security sedimentations

Assorted pay card companies like Dancom, World call, Pearl Tel, Soft tech, deposited immense sum as the procuring sedimentation in the books of PTCL for the media that is being used by these companies. PTCL is using these security sedimentations.

Tax return on sedimentations

After payment the dividend to the portion holders and holding paid the income revenue enhancement on the net income the excess sum is being used in the sedimentations of assorted national and transnational Bankss from where ROD is received consequently.

Dividend Income

PTCL some clip itself purchases the portion from the unfastened market and gain the dividend income thereof. It is besides perchance that PTCL if applicable may confine the portions of different other companies and earn the dividend.

Sale returns of fixed assets

The defunct and dismantle Telephone exchanges non allowed re-sell to the other developing states and addition net income. PTCL is besides non in the procedure of planning to be used the idle land, which could be used on commercial footing by other parties.

Long- Term Investment

There are assorted long-run undertaking of PTCL. BLT is one of them. PTCL is now spread outing its concern through the United Arab Emirates by pool and through the

joint venture with other telecom operators. PTCL has besides some long-run investing in the AT & A ; T ( American Telephone & A ; Telegraph ) and ZTE ( Zehwing Telecom Engineering Company China ) .

Long-run Loan to others

PTCL has besides offered long term loan understanding to other Telecom supplier companies. PTCL is supplying its expertness and Engineers to them and besides offering sum to be invested on behalf of PTCL for illustration PTML Pakistan Telecom Mobile Limited and Paknet the Internet suppliers company.

Loans, progresss, sedimentations, prepayments and other receivable

In this context all the referred point and return thereof will be called the receivable.

*

3.4 ALLOCATION OF FUNDS

Against all purchase orders issued by the PTCL H/Q ‘s Islamabad payment made after allotment of Funds which farther allocated by the Regional offices. The financess normally allocate in order to pull off the followers: –

Capital outgo

Purchase of substructure like new exchanges.

Establishing of new Product.

Human resource development

Transportation system disbursals, misc disbursals

Domestic and abroad preparation of staff

Bonus to the employees, house/building progresss, motor car/motor rhythm progresss.

Worker compensation fund, benevolent fund part general provident fund

Care of edifices, vehicles, fixed assets.

Default state of affairs of subordinates.

Allotment of Fundss for Marketing geographic expedition 19 % of net net income

Allotment of Funds for Research & A ; development 18 % of net net income

Allotment of Fundss for Human resources & A ; Admin 33 % of net net income

Allotment of Fundss for Corporate personal businesss 30 % of net net income

3.5 Use OF ELECTRONIC DATA FOR DECISION MAKING

PTCL is utilizing the Oracle package being front terminal and back terminal for its system charge. Actually this is tone-system it means that when one endorser dialed another figure so pulse continuance started with the start of transition the local metre reading is called M1 and NWD metre reading is called M2. In the telephone exchange one metre is dedicated to each telephone figure, which memorized all M1+M2 calls, and so all informations appears on the large film-coated tape.

That tape subsequently on sent to the charge centre in part where a System Administrator constellation informations subscriber already availed. By seting the prophet being backend all NWD calls made from specific figure printed along with the printing of telephone measure and besides printed being front-end procedure.

For the inter-departmental communicating the central offices and parts the intranet is being used by the PTCL portal system. There is dedication of dot net system provided to each officer who is online in the context of portal system.

There is besides end-user package, which is being introduced in the PTCL through which a endorser will now pay his telephone measure even on day-to-day footing. There will be used of terminal system on each Customer Care Center where endorser will acquire his measure for he period harmonizing to his/her want. The endorser can besides pay his measure in progress.

There is besides usage of teleconferencing in the PTCL on regional degree, where the General Manager keep teleconferencing with Divisional Engineers and Senior Revenue Officers one time in a hebdomad in which each one wage his remarks about their several wings.

In 2007 PTCL launch new package BNCC.

3.6 FINANCIAL ANALYSIS

Chapter No. 4

4.1 Vertical Analysis of Financial Statement

2007

2008

2009

Issued, subscribed and paid up capital

2.342

2.408

2.427

Gross militias

– Insurance modesty

7.881

7.944

8.009

– General modesty

1.362

1.440

1.452

– Unappropriated net income

6.543

7.653

4.900

Non current liabilities

Collectible to PTA against WLL licence fee

1.194

Long term security sedimentations from

4.339

2.35

4.45

-Customers -non involvement bearing

4.545

4.670

4.528

Deferred revenue enhancement

3.211

1.123

4.521

Employees ‘ retirement benefits

5.65

6.678

6.779

Deferred authorities grants

4.982

5.005

4.515

16.24

17.476

21.537

Current liabilities

Trade and other payables

3.223

1.233

2.617

Current part of collectible to PTA against

WLL licence fee

5.568

9.225

Tax

4.321

1.738

8.637

Dividend collectible

5.322

3.612

Non current assets

Property, works and equipment

3.223

3.671

3.941

Capital work-in-progress

4.675

4.645

3.757

Intangible assets

3.871

1.567

4.281

Long term investings

3.222

2.648

1.717

Long term loans

2.201

1.573

1.878

Current assets

Shops and spares

1.983

2.456

2.358

Trade debts

4.424

5.081

6.363

Loans and progresss

3.232

2.786

4.227

Accrued involvement

4.215

3.870

4.281

Recoverable from revenue enhancement governments

5.292

4.998

6.582

Other receivables

6.516

3.295

7.813

Receivable from Government of Pakistan

1.095

1.021

1.029

Short term investings

7.982

9.923

4.305

Cash and bank balances

5.219

5.623

2.163

4.2 Horizontal Analysis of Financial Statement

2007

2008

2009

Issued, subscribed and paid up capital

100 %

102.0

102.4

Gross militias

– Insurance modesty

100 %

104.05

107.9

– General modesty

100 %

107.09

114.29

– Unappropriated net income

100 %

102.4

72.1

Non current liabilities

Collectible to PTA against WLL licence fee

1.194

Long term security sedimentations from

100 %

55.98

89.21

-Customers -non involvement bearing

100 %

103.07

97.12

Deferred revenue enhancement

100 %

40.20

87.21

Employees ‘ retirement benefits

100 %

56.21

78.67

Deferred authorities grants

100 %

116.23

89.34

Current liabilities

Trade and other payables

100 %

41.21

60.42

Current part of collectible to PTA against

WLL licence fee

100 %

9.225

Tax

100 %

1.738

8.637

Dividend collectible

100 %

3.612

Assetss

Non current assets

Property, works and equipment

100 %

122.5

132.7

Capital work-in-progress

100 %

4.645

3.757

Intangible assets

100 %

76.37

83.21

Long term investings

100 %

67.54

23.45

Long term loans

100 %

45.21

52.32

Current assets

Shops and spares

100 %

65.24

56.42

Trade debts

100 %

75.1

63.63

Loans and progresss

100 %

52.7

57.34

Accrued involvement

100 %

59.21

39.78

Recoverable from revenue enhancement governments

100 %

4.998

6.582

Other receivables

100 %

3.295

7.813

Receivable from Government of Pakistan

100 %

1.021

1.029

Short term investings

100 %

9.923

4.305

Cash and bank balances

100 %

115.3

71.63

4.3 Ratio Analysis

Ratio means “ one figure expressed in footings of another “ . Ratio is a statistical yardstick by agencies of which relationship between two or more assorted figures can be compared and measured. The ratio analysis can be done under

4.4 LIQUIDITY RATIOS

CURRENT RATIO

Current ratio

Current assets

Formula = — — — — — — — — — — — – A- 100

Current Liabilitiess.

Old ages

2007

2008

2009

Ratio

2.22

1.72

1.90

Remarks on current Ratio:

A liquidness ratio that measures a company ‘s ability to pay short-run duties. The current liabilities are really increase in 2008 as comparison 2009 that ‘s why current ratio of 2008 severely down in 2008 but in 2009 PTCL has better its assets. But infect PTCL has no control on liabilities besides in 2009

Fig.4.1

Quick ( acid-test ) ratio

Current assets – Inventories

Formula = — — — — — — — — — — — — — — — — — — — — – A- 100

Current liabilities

Table.6

Old ages.

2007

2008

2009

Ratio

2.06

1.53

1.79

Remarks:

the Acid-test or speedy ratio or liquid ratio measures the ability of a company to utilize its close hard currency or speedy assets to instantly snuff out or retire its current liabilities. Quick assets include those current assets that presumptively can be rapidly converted to hard currency at near to their book values. A liquidness ratio that measures a company ‘s ability to pay short-run duties. The current liabilities are really increase in 2008 as comparison 2009 that ‘s why current ratio of 2008 severely down in 2008 but in 2009 PTCL has better its assets. But infect PTCL has no control on liabilities besides in 2009

fig.4.2

Tax return on assets

Net income

Formula = — — — — — — — — — — —

Entire assets

Old ages

2007

2008

2009

ROA

20.56

13.63

15.69

Interpretation:

An index of how profitable a company is comparative to its entire assets.A ROA gives an ideaA as to how efficientA direction isA at utilizing its assets to bring forth earnings.A Calculated by spliting a company ‘s one-year net incomes by its entire assets.in 2007 the ROA of PTCL is rather increase as compare old 3 old ages. But PTCL back down in 2008 due to increase in liabilities.

Fig.4.3

Tax return on assets

Average Debtors

Formula = — — — — — — — — — — —

Recognition sale/365

Year

2007

2008

2009

Ratio

4.46

4.60

4.71

Remarks:

A concern may sell goods on hard currency every bit good as on recognition. Credit is one of the of import elements of gross revenues publicity. The volume of gross revenues can be increased by following a broad recognition policy. ROA was addition in 2008 as comparison 2007 due to establishing of broadband by PTCL

Fig.4.4

Tax return on Equity

Net income after revenue enhancement

Formula = — — — — — — — — — — — — — — –

Shareholder equity

Old ages

2007

2008

2009

Ratio

14.45

12.71

13.78

Remarks:

One of the most of import profitableness prosodies is return on equity ( or ROE for short ) . Return on equity reveals how much net income a company earned in comparing to the entire sum of stockholder equity found on the balance sheet. If you think back to lesson three, you will retrieve that stockholder equity is equal to entire assets minus entire liabilities. It ‘s what the stockholders “ ain ” . Shareholder equity is a creative activity of accounting that represents the assets created by the maintained net incomes of the concern and the paid-in capital of the PTCL.

Fig.4.5

Net Margin

Net net income

Formula = ____________

Gross

Year

2007

2008

2009

Ratio

23.96

12.65

17.98

Remarks:

This ratio measures the firm`s ability to do contractual involvement payments. It shows whether the bank is gaining adequate net income before grade up charges to be paid to the moneymans and the revenue enhancement duties due to the authorities in order to stay solvent.

In 2007 the net net income of PTCL much high but its autumn down in 2008 as 12.67.which is negative mark for PTCL.

Fig.4.6

Profitability ratios:

Operating net income border

Operating net income

Formula = — — — — — — — — — — — — — — — — A- 100

Net markup/interest income

Old ages

2007

2008

2009

Ratios

28.67 %

12.75 %

19.31 %

Significance: It should be maximal.

Remarks:

Operating net income for a certain period divided by grosss for that period. Operating net income border indicates how effectual a company is at commanding the costs and disbursals associated with their normal concern operations. Operating net income of PTCL was good in 2007 as 28.67 but its haste down in 2008 as 12.75 but PTCL support its operating net income in 2009 as 19.31 which 70 % addition as compare 2009.

Fig.4.7

Net net income border

Net net income after revenue enhancement

Formula = — — — — — — — — — — — — — — — — — — — — — — – A- 100

Net markup/interest income

Old ages

2007

2008

2009

Ratios

23.96 %

14.42 %

17.98 %

Significance: It should be maximal.

Remarks:

The net income border Tells you how much net income a company makes for every $ 1 it generates in gross or gross revenues. Net income borders vary by industry, but all else being equal, the higher a company ‘s net income border compared to its rivals, the better in 2007 due to involvement income but PTCL bad lessening in 2008 as 14.42 % due to big figure of liabilities.

Fig.4.8

4.5 Decision

With employee strength of 30,000 and 5.7 million clients, PTCL is the largest telecommunications supplier in Pakistan. PTCL besides continues to be the largest CDMA operator in the state with 0.8 million V-fone clients.

The company maintains a prima place in Pakistan as an substructure supplier to other telecom operators and corporate clients of the state. It has the possible to be an instrumental agent in Pakistan ‘s economic growing.

PTCL has laid an Optical Fibre Access Network in the major metropolitan Centres of Pakistan and local cringle services have started to be modernized and upgraded from Cu to an optical web.

On the Long Distance and International substructure side, the capacity of two SEA-ME-WE pigboat overseas telegram is being expanded to run into the increasing demand of International traffic.

Pakistan Telecommunication Corporation ( PTC ) has established in December 1990, taking over operations and maps from Pakistan Telephone and Telegraph Department under Pakistan Telecommunication Corporation Act 1991.

This coincided with the Government ‘s competitory policy, promoting private sector engagement and ensuing in award of licences for cellular, card-operated payphones, paging and, recently, informations communicating services.

In 1994, the PTC becomes the company limited ( Pakistan Telecommunication Company Limited ) by issued six million verifiers exchangeable into 600 million portions of the

PTCL in two separate arrangements. Each had a par value of Rs. 10 per portion. These verifiers were converted into PTCL portions in mid-1996.

In 1995, Pakistan Telecommunication ( Reorganization ) Ordinance formed the footing for PTCL monopoly over basic telecommunication sector in the state. It besides paved the manner for the constitution of an independent regulative government. The commissariats of the Ordinance were lent permanency in October 1996 through Pakistan Telecommunication ( Reorganization ) Act.

The twelvemonth 2007-09 in the telecom sector was marked by the phenomenal growing in the nomadic sector in Pakistan, which doubled its subscriber base to 60 million. The teledensity increased from 26 % to 40 % , assisting to distribute the benefits of communicating engineering across the state. PTCL ‘s Mobile nomadic phone subordinate Ufone ‘s endorser base grew by more than 87 % , from 7.49 million to 14 million. The twelvemonth besides witnessed the entry of major telecom companies, most notably China Telecom and Singtel, into market.

The denationalization of the company was completed in the FY06, following the buyer of 26 % ‘B ‘ category ordinary portions by Etisalat International Pakistan L.L.C.EIP took over direction control on 12th on April 2006.No uncertainty P.T.C.L holding the monopoly in supplying the Land-Line Telephone Connection in Pakistan and its playing its function excellently. In current scenario P.T.C.L has increases its Revenue rather dramatically and likely that every bit shortly as this organisation has become privatized it will boom its gross in better mode.

PTCL should instantly alter its Finance upper degree of hierarchy and should stream line in the good manner.PTCL should besides promote the Billing On line system that each and every client should hold to pay his/her measure on line footing.

The system of E-PAYMENT which although exist in PTCL finance system but there is demand of betterment this installation. The image of PTCL being taking Telecom Providing is non good in the eyes of common client particularly there are batch of ailments about the including the fake local calls in the monthly measures of assorted clients. PTCL should besides supply the item of local calls made from any Land Line Number which would be provided in Micro degree to the client.

Faulty Telephone connexion should be Fault Free within 24 hours in order to maximise the Revenue, as Revenue of PTCL should give at the cost of Faulty Telephone.

really polite and they are caring about the person ‘s calling and their growing.

PTCL needs advanced service offerings – presently it does n’t even offer packages or a individual measure. Has been ill-defined about its IPTV and WiMAX program and scheme ( tests are in advancement ) Overall PTCL still behaves as a monopoly aˆ¦ it has to alter its attitude. At a lower limit, avoiding charge mistakes and supplying competent and gracious service to its clients is indispensable if PTCL wants to demo that it is transforming itself to a competitory company which cares for its clients.

It is said that the best assets of a company travel place to their household in the eventide. Can the civilization of PTCL be changed to a public presentation and service-based organisation? Harmonizing to the latest manager ‘s study from PTCL the “ organisation is being revamped ” .A Lone clip can state the impact.

However direction is really demanding about the marks but good wages at the accomplishment of assigned marks is awarded. Employees at PTCL are rather efficient. Its employees have to convey their org among the list of good. Therefore, they work more than their on the job hours and it is all harmonizing to their will. It besides shows their trueness, committedness to organisation.

Employees are given the benefits like fillip, tip financess, loans, increases, and medical. All the clients are entertained separately. Same sort of behaviour and attending is given to all the clients. Geting thoughts for betterment from client side is a new thought and that is working really good in PTCL. All the clients are asked to make full a suggestion signifier and the criterions of the org are improved through them.

Prioritizing its merchandise portfolio in line with its corporate and consumer demands and wants the org are committed to develop merchandises that give more value to its clients in both the sectors.

In PTCL, all the work is done on computing machines. All the entries are made in computing machine. Balance is fed into the computing machine. This increases efficiency of the organisation. During my internship preparation I gathered information sing how a successful org operational facet decorticated with the practical.

I found my internship preparation at PTCL to be a really rewarding experience. The preparation was good because it helpful me to aware a existent life working environment. So far my acquisition is concerned ; all the employees at subdivision were rather concerted. They helped me to understand the activities of a org to possible extent. Their good attitude gave me more assurance to larn more and to inquire if I have any question in my head. Besides there of all time traveling activities they ne’er get irritant by my inquiring. I had made an honorable motor nerve to show the working & A ; operation of PTCL in simplest manner.

I feel pleasure that I have truly gained a batch during 6 hebdomads & A ; enjoyed working with experient concerted & A ; intelligent staff.

Chapter No. 5

5. SWOT Analysis of fiscal statement.

5.1 Strengths

5.2 Failing

5.3 Opportunities

5.4 Menaces

5.5 Suggestions and Recommendations

No uncertainty P.T.C.L holding the monopoly in supplying the Land-Line Telephone Connection in Pakistan and its playing its function excellently. In current scenario P.T.C.L has increases its Revenue rather dramatically, and likely that every bit shortly as this organisation has become privatized it will boom its gross in better mode.

PTCL should instantly alter its Finance upper degree of hierarchy and should stream line in the good mode.

PTCL should besides promote the Billing On line system that each and every client should hold to pay his/her measure on line footing.

The system of E-PAYMENT which although exist in PTCL finance system but there is demand of betterment this installation.

The image of PTCL being taking Telecom providing is non good in the eyes of common client particularly there are batch of ailments about the including the fake local calls in the monthly measures of assorted clients. PTCL should besides supply the item of local calls made from any Land Line Number which would be provided in Micro degree to the client.

Faulty Telephone connexion should be Fault Free within 24 hours in order to maximise the Revenue, as Revenue of PTCL should give at the cost of Faulty Telephone.

PTCL should do Customer Care Centers in distant countries.

The punching system of Billing through mechanization at CITI Bank Karachi takes so much clip to set so it should be revived.

The Financial D.D.O powers should be entrusted to the Director Finance instead GM.

PTCL is non using its excess net income in long-run investing undertakings which be done.

PTCL direction should give concentration towards the Securities of sedimentation and it should be on maximal degree.

The return on sedimentation should be checked consequently.

The hard currency generated from the operation must be utilised consequently.

Each Region should apportion the financess at its ain degree.

PTCL should take the services of extremely qualified fiscal analysts.

The publicity system in the Finance & A ; Revenue wing should be revived in true mode all publicity must be made purely on virtue.

Each Region should keep Profit & A ; Loss and Balance sheet and the statement of Cash influx and escape.

5.6 Future PROSPECTS OF THE PTCL

Expansion in the Local Loop System WLL system

Expansion of the Broadband System

Reduce the NWD, International, Local Calls rate for facilitation the client

Expansion of TDMA, PRI, BRI, LLO system for maximization net income

Free of cost value added services.

Reduce the Duty of Assisted Trunk Dialing System.

Free CLI ( Caller Line Identification ) system in Land Line system

Free DXX ( Digital Cross Connect ) system

Reduce the duty of Internet charges in order to spread out the clients

Free local calls rate and cut down the Line Rent, which is Currently Rs. 200-00

E-Payment, online charge payment system to ease the clients

Expansion in the undertaking of BILKUL-MUFT strategy

Reduce the installing charges of telephone

Undertaking to supply the Local calls inside informations to all clients

Expand the concern on international degree

Increase the investing on the international degree

Reduce the charges of Co-Location Charges